The unprecedented suspension of Australia's east coast energy market could be lifted as early as Thursday but the market operator is warning the challenges managing supply and demand may continue.
The Australian Energy Market Operator (AEMO) last week seized control of the east coast energy market for the first time in its history after days of volatility put several states at risk of blackouts.
The federal government backed the intervention, acknowledging the energy market had effectively failed, and credited the AEMO with successfully managing to avoid both blackouts and load shedding as temperatures on the east coast plummeted.
But after a meeting with the energy sector on Tuesday, guidelines have been drawn up for a "staged process" to resume regular operations, with the AEMO suggesting the suspension could be lifted as early as Thursday.
"These criteria will … give AEMO sufficient confidence that it can end the market suspension with minimal risk of the same conditions re-emerging in the very short term," AEMO said in a statement.
"AEMO anticipates monitoring will continue for at least 24 hours and, if AEMO is confident the criteria are being met, the next step is to formally remove the market suspension and resume normal operation under the market rules."
The market operator has confirmed there is sufficient supply to get through Wednesday but has revealed it is still directing generators to pump power into the network.
"Conditions remain dynamic, requiring AEMO to manually direct generators to be available to meet consumers' energy needs," it said in a statement.
And it has warned, regardless of when the suspension is lifted: "There may continue to be challenges managing supply and demand."
The crisis has been caused, in part, by soaring global coal and gas prices and an ageing fleet of coal-fired power stations in Australia operating below capacity.
